RE-UTILIZATION/DISPOSAL OF EXCESS MATERIAL

A-51
Application of Proceeds from the Sale, Trade-In, or Transfer of University
Property

B.UCSD
Policy and Procedure Manual (PPM)

300-20
Sub-Cashiering and Change Funds

522-1
Property Inventory Control System Operating Procedures

C.Accounting
Manual

R-216-62
Recording Proceeds from the Sale, Trade-In or Transfer of University Property

II.POLICY

A.This
policy provides guidelines to departments or operating units concerning the
reutilization/disposal of property owned by The Regents of the University of
California. It does not apply to federally-owned property in the control of
The Regents. (See PPM 522-1, paragraph XIII, concerning
federally-owned materiel.)

Departments or operating
units having excess/surplus equipment and materials are encouraged to declare
them excess and permit the Equipment Management Division to relocate the items
in one of the following ways:

1.Sell the
equipment or material to another campus department.

2.Sell the
equipment or material to another UC campus.

3.Sell the
equipment or material by public sale.

This policy is not
concerned with the trade-in of equipment or material to a vendor for credit on a
new purchase. This area is covered in PPM 522-1 Section XII.A.

III.DEFINITIONS

A.For
the purpose of this policy, the following terms have special meaning:

1.University
Material:
Equipment or material unconditionally owned by The Regents.

2.Sale: The
conveyance of property between departments or campuses with an exchange of
funds, or to an individual or organization outside the University for cash or
money equivalent.

IV.PROCEDURES

A.Determination
and Reporting of Excess Material

1.Department

a.Department
chair or head shall determine when University material has no further value to
the department and can be disposed of as excess material.

b.The department or
operating unit declaring material excess will complete and Equipment
Inventory Modification Request (EIMR), Exhibit A, and forward it to
the Equipment Management Division of Materiel Management. The EIMR should
indicate the condition of the equipment or material and nay include the
suggested selling price. No sale will be consummated without the prior approval
of the Materiel Management Department.

If the material to be
sold is inventorial, the property number assigned must be shown on the EIMR. An
EIMR is the only way an inventorial item may be deleted from departmental
inventory records.

c.If the
department or operating unit declaring equipment or material excess is aware of
potential users or buyers, this information should be forwarded with the EIMR.

2.Materiel
Management

a.If the
excess material has an individual or per lot value currently estimated at
$10,000 or more, all other campuses must be given an opportunity to purchase it
before it is placed on public sale. This requirement, however, does not apply
to the disposal of automotive equipment.

b.Usable equipment and
materials will be held for 30 days by Surplus Sales for purchase by University
departments.

c.Items not
sold within 30 days will be disposed of by methods deemed appropriate by the
Materiel Management department.

B.Methods
of Disposal to the Public

Disposal may be made by
the following methods:

1.Public
sale to the highest bidder.

2.Public sale
on a "first come, first served" basis if a fair market value has been
established by the Materiel Manager and the availability and price of the
item(s) are made known to the general public through newspaper advertising
and/or other announcement.

3.Private
sale to an individual when the cost and effort involved in arranging for a sale
by methods 1. or 2. would be disproportionate to the return expected, and the
Materiel Manager has determined that the sale price is reasonable.

4.Donation of
excess material to an organization outside the University if the market value
of the excess material is below the costs required for handling, record
keeping, storage, and other costs associated with trade or sale; and either the
specific prior review and approval of the General Counsel has been secured, or
the General Counsel has given blanket approval for donation of specific
categories of excess material to educational institutions, other government
bodies, or non-profit organizations.

5.Disposal of firearms
requires special handling based on the Code of Federal Regulations, part 178 of
27CFR.

C.Accounting
for the Sale of Excess Material

1.
a. Sale to another department on campus of excess/salvage material
will be accomplished through the use of a Financial Journal prepared by
Materiel Management/Surplus Sales.

b. The
department acquiring the material will receive a debit to its account for the
agreed-upon sales price. The department selling the material will receive
a credit for the agreed-upon sales price less the Equipment Management and
Committee on Research factors discussed in C.5., below. Exhibit B
contains a diagram for determining the account to be credited.

2.
a. Sale to another campus of excess/salvage material will be
accomplished through use of a Recharge Form. Surplus Sales will complete
the Recharge Form and forward it to the Accounting Office for processing.

b. The
campus acquiring the material will receive a debit to its account for the
agreed-upon sales price. The department selling the material will receive
a credit for the agreed-upon sales price less the Surplus Sales and Committee
on Research factors discussed in C.5., below. Exhibit B contains a
diagram for determining the account to be credited.

3.Sale to an
individual or organization outside the University will be processed as follows:

a.Surplus
Sales will use Exhibit C to notify the selling department of its credit
for the sales price less the Equipment Management and Committee on Research
factors discussed in C.5., below.

b.Exhibit B contains a diagram for
determining the account to be credited.

4.Sales
proceeds credited to fund 68310 may be carried forward for one fiscal
year. Balances remaining after that time will be transferred to General
Funds and lapsed.

5.
a. Surplus Sales is authorized to recover from the proceeds of any
sale all specific costs such as long-distance telephone calls and
postage. A fee to recover Equipment Management's general administrative
costs is also authorized. The fee will be 25% of sale proceeds but shall not exceed
$500.00

b.
Normally, an additional 10% of the sale of excess equipment and material
originating in Instructional and Research departments will be allocated to the
Committee on Research for use in furtherance of internal research efforts.

V.RESTRICTION

Special procedures are
required to sell property to which the University holds conditional title.
(Conditional title reserves to the transferor (title holder) the right to revoke
transfer of title, to receive the proceeds of any subsequent sale, or to
acquire an interest in replacement.) Generally, departments should obtain
unrestricted title to property before it is declared excess for disposal.

VI.Limitation
of Sales to Certain Employees and Their Near Relatives

A.No one
employed in a Materiel Management department, or a near relative of such
employee, may buy excess material either directly or through a public sale.

B.No one
employed in a department originating excess material, or a near relative of
such employee, may but excess material originating in that department either
directly or through a public sale.

C.The principal
driver of a University-owned motor vehicle, or a near relative of such
employee, may not buy such motor vehicle either directly or through public
sale.

Near relative is
defined as husband, wife, mother, father, daughter, son, sister, brother, and
step-relatives and in-laws in the same relationships. Exceptions to this
provision must be approved only by the Vice Chancellor-Administration.

VII.RESPONSIBLITIES

A.Department
Chair or Head

Determine those items
which will be declared excess and direct preparation of proper forms.
Supply all agency approvals for the sale of equipment/material not owned by the
University as required.

B.Materiel
Management

1.Determine
that the University can legally sell the equipment/material declared excess.

2.Make
arrangements for pick-up of equipment or material declared excess.

3.Process
all necessary paperwork to relocate or dispose of the equipment/material
declared excess.

Recognizing that
transferring federally-funded University-owned material is an accepted practice
among the academic community, the following special provisions for transferring
such material to other education institutions, governmental bodies, or
non-profit organizations may be applied. However, under no circumstances
whatsoever shall these special provisions apply to material acquired with State
general funds.

A.In
order to transfer material acquired with federal contract and grant funds to
another institution, in conjunction with a move by a faculty member to that
institution, the following conditions must be met:

1.The
material must be available for transfer: its title must be vested in the
University, and the terms of the grant or contract from which it was funded do
not prohibit such transfer to another institution.

2.A written
request to transfer the material must be made by the department faculty member
and must include the following:

a.A specific
list of the material including (at a minimum) property numbers, descriptions,
original unit costs, and original funding sources/agencies.

b.The reason for the
transfer.

c.Name of
the institution to which title will be transferred.

d.Justification for
transferring rather.than leaving or selling the
material.

3.The
request must be approved by each of the following:

a.Department
head.

b.Dean.

c.Equipment
Manager (or equivalent) - verifies that title vests in the University and that
there are no restrictions to transfer.

d.Director of Sponsored
Projects (or equivalent).

4.Transfers
of material with a total historical cost in excess of $100,000 must be
approved by the Vice Chancellor-Administration, the Senior Vice President­
Administration. Requests for material transfer shall not be divided to avoid
this requirement.

5.The
recipient institution must agree, in writing, to accept title, with the
understanding that the material is for the initial use of the new faculty
member. This agreement may be obtained via a standard acceptance form signed by
an appropriate officer of the recipient institution.

B.The
Equipment Manager (or equivalent) shall verify that all required approvals (as indicated
in A above) have been obtained and shall approve the release of the material
from custody.

C.Unless
specific provisions are made in the terms of a contract or grant, transfers of
material to individuals or for-profit organizations are prohibited.

Exceptions to the
provisions of Section VIII. herein must be approved by the Senior Vice
President-Administration. This authority to approve exceptions may be
re-delegated by the Chancellor only to the Vice Chancellor-Administration.

EXHIBIT
A

EXHIBIT
B

DECISION DIAGRAM-SALE OF
UNIVERSITY

PROPERTY TO CAMPUS
DEPARTMENT OR ANOTHER UC CAMPUS

Does University Have

Unconditional
Title?
no

Did
Agency Specify Credit to Existing Fund?

Did Agency Request no
a Refund?

yes
yesyes

Record as
Expense
Record as Sundry

Was Property Acquired

with Federal
Funds
yes

Credit
to Federal

Fund

Is
Fund or Follow-On

Fund
Still Active?

Payable

yes
Record as Expense

Credit
to

Federal
Fund

no
no

Record
as Expense

Credit
to

Fund
68310

Was Property Acquired with State Funds or Used by State or
General Fund programs or activities?

no

yes

Record
as Expense

Credit
to

Fund
68310

Was Property
Acquired
Record as Expense with Funds of a Self
yes
Credit to Self- Supporting
Activity?*
Supporting Fund